India’s economy posted a six-quarter high GDP growth of 8.2% in Q2 FY2025-26, outpacing expectations as strong manufacturing output and a robust services sector offset a slowdown in agriculture. The growth rate was higher than the 7.8% recorded in the previous quarter and significantly above the 5.6% seen a year earlier.
This performance also helped India retain its position as the world’s fastest-growing major economy, with China expanding 4.8% during the same period.
According to the National Statistics Office (NSO), GDP growth for the first half of FY2025-26 averaged 8%, compared with 6.1% in the year-ago period. With this momentum, India appears poised to surpass the full-year growth target of 6.3–6.8% projected in the Economic Survey.
Manufacturing and Services Drive Growth
Manufacturing grew 9.1% year-on-year, a sharp rise from 2.2% last year. Factories scaled up production in anticipation of festive-season demand following Prime Minister Narendra Modi’s GST rate cut announcement in his Independence Day address. The revised rates took effect on September 22.
The services sector—including finance, real estate and professional services—expanded 10.2%, significantly higher than 7.2% in Q2 last year.
However, agriculture growth slowed to 3.5%, down from 4.1% a year earlier.
Economists See Growth Surpassing 7% for FY26
The RBI, earlier in October, revised its GDP projection upward to 6.8% for the current financial year.
Key GDP Indicators
- Real GDP (Constant Prices), Q2: ₹48.63 lakh crore vs. ₹44.94 lakh crore last year
- Nominal GDP (Current Prices), Q2: ₹85.25 lakh crore vs. ₹78.40 lakh crore
- Real GDP, H1: ₹96.52 lakh crore (8% growth)
- Nominal GDP, H1: ₹171.30 lakh crore (8.8% growth)
- Private Consumption Growth (PFCE): 7.9% vs. 6.4% last year
- Gross Fixed Capital Formation: 7.3% growth
India continues to demonstrate strong macroeconomic resilience, with analysts expecting growth to stay above 7% despite global uncertainties.
